Envy stimulates the economy—and is why you bought your iPhone

A new study that used iPhones as objects of envy found that a certain kind of …

The year is 2007 and your friend pulls a shiny new iPhone out of his pocket. It's the first one you've ever seen, and you stare agape as he lovingly taps the screen. A feeling starts to bubble up inside—contempt? Rage? Hunger? No—it's that biblically reviled emotion we know as envy.

While it's no secret that envy often drives us to action, it's only recently that scientists have realized there might be a brighter side to envy, at least for businesses. Some assume that generating envy will boost sales, but just as often pushing for envy seems to create resentment and sales slump. According to a recent study that involved perception of iPhones, this envy response can actually be tuned based on different factors that push consumers toward or away from a product.

To study envy, a group of researchers at Tilburg University in the Netherlands undertook a few different experiments with students there. They all involved inviting participants to compare themselves to individuals who had received some sort of windfall in life, and seeing how it affected their outlooks on life.

In the first experiment, the scientists wanted to look at how envy was created. The students in the study were told about an "attractive" internship opportunity at a bank, and then met two students—one with a similar background, and another whose background was different—who had been selected for the internship.

The students were naturally more envious of the similar student; however, when explicitly asked to compare themselves to the dissimilar student, they became more envious of that student too. More importantly for businesses, the more that people compared themselves and generated envy for the bank interns, the more they were willing to pay for the bank's services.

iPhone envy, good and bad

The authors wanted to refine their understanding of envy further, so they created two more experiments to distinguish between two types of envy: benign, where the object of envy's advantages are deserved, and malicious, where their advantages seem undeserved. The experiments centered on the iPhone, one of the biggest envy-eliciting products in recent memory.

First, they asked students to read a story about a study group where one member pulled out his iPhone and started showing its features to the other members. The students were then asked to imagine themselves being admiring and jealous of the iPhone owner (benign envy), jealous and begrudging (malicious envy), or as a control condition in which they liked the iPhone (which was likely hard to imagine for the Android users among the participants, but they endured).

The students who had to imagine being benignly envious turned out to find the iPhone more attractive than the controls or the maliciously envious. They also said they would pay 60 euros more for an iPhone than the controls would.

The third experiment focused in on malicious envy. Previous research shows that people experiencing malicious envy often cope by trying to "socially differentiate" themselves from the person they're envying—for example, a person with a smaller house and less fancy car than his lawyer neighbor might convince himself that the lawyer behaves unethically to earn so much money.

To prompt this feeling in participants, the researchers had them watch a video recording of another student talking about his iPhone. They fostered malicious envy with a modified recording in which the student said his father bought him the iPhone, and benign envy with a modified recording where the student said he worked to earn enough money to buy his own iPhone.

The students who watched the hard-working iPhone owner said they were willing to pay 117 more euros for the iPhone than the control subjects, who saw videos that contained no information on where the iPhone came from. The benign envy subjects were also willing to pay 75 euros more than the malicious envious students.

What was more surprising was the effect of malicious envy on the students' perception of similar, non-iPhone products. The students who had to watch someone say daddy paid for his iPhone said they would pay a little bit more for an iPhone than control students. But they said they would pay a lot more than the controls for a competing phone, the BlackBerry 8820—98 euros more, to be precise.

This study says little about the personal effects of envy, but much about the economic effects—that is, if a company can get its customers to rigorously compare themselves against an opponent's customers and view themselves as slightly superior (thanks in part to their enlightened products), those customers can turn into nearly blind followers.

Even the product itself was nearly immaterial—the fact that it was expensive and that whoever had it was willing to gush about it seemed to be enough to stimulate envy and desire (even an impulse to pay more for it). The profile of the owner mattered much more. But that profile could even have a negative impact, driving customers away and directly into the arms of a competitor.

Of course, the experiments aren't without their problems: a psych study is not an actual economic forum, and it's hard to say whether the students would have followed through with their assertions about the products' values. Also, the factors studied here are only a few of many that can influence feelings of envy and purchase decisions. Still, envy seems to actually be a powerful economic force, but one that businesses have to walk a fine line to harness.